Holding out the medic bag will heal yourself and friendlies standing in front of you. You can also throw them on the ground for other people to run over and be healed instantly. If you are defending a flag, throw a few around for others to grab when they become injured. You supply of medic bags is infinite, so keep on distributing it.
Be warned: enemies can use these, and if you are trying to hide, don't throw medic bags out, if an enemy has the 3d map turned on, a red cross icon appears on their HUD, even through a thin wall and will give your position away. Even more if you throw them you'll cry out “get help over here”, in any given language. Your enemy will be able to hear you, and find the source of this proclaimed healthcare.
When friendly soldier's health drops below 50% a bar will appear above there name in the 3d map indicated how much health they have remaining, and in the mini-map, friendlies with low health have a red glow around their icon. You will receive a point if you heal these guys up to full health.